Valid share-based incentive programs

Performance and share value based long-term incentive program 2017-2020 
 
On February 14, 2017, the Board of Directors of Raute Corporation has decided on the establishment of a new performance and share value based long-term incentive program for Raute Group's top management. The aim of the plan is to align the objectives of the company's management with the shareholders in developing the company value and to commit the management to achieving the strategic targets of the company through offering them a competitive long-term incentive scheme. 
 
The program consists of annually commencing individual three-year plans. The individual plan may either comprise a three-year performance period or a one-year performance period followed by a two-year restriction period. The potential reward attained under the individual plan will be paid after the three-year plan period. The potential reward will either be paid in listed series A shares of Raute or in cash. 
 
The commencement of each individual plan, the length of the performance period within the plan, the performance criteria, the eligible participants thereof and the earning opportunity is subject to a separate decision of the company's Board of Directors in each case. 
 

LTI Plan 2017-2019
LTI Plan 2017–2019 commenced at the start of 2017. The plan consists of a one-year earnings period and the subsequent two-year vesting period. The bonuses shall be paid in spring 2020. The plan covers altogether 12 persons belonging to the Group's senior management, including the Group's President and CEO and the members of the Executive Board. The performance targets are earnings per share (EPS) and growth in net sales. 

LTI Plan 2018-2020
LTI Plan 2018–2020 commenced at the start of 2018. The plan consists of two parts. The first part consists of a three-year earnings period. Its weight is 80 per cent of the whole plan and the performance target is the Total Shareholder Return (TSR) proportioned to the peer group. The second part consists of a one-year earnings period and the subsequent two-year vesting period. Its weight is 20 per cent of the whole plan and the performance target is Earnings Per Share (EPS). Any rewards based on both parts will be paid in the spring of 2021 if the performance targets set by the Board of Directors are achieved. Eleven persons belonging to Raute Group's top management, including the members of the Executive Board, are entitled to participate in the LTI 2018–2020 system. 

In accordance with the ownership recommendation the company abides by, each participant in the plan is expected to accrue and, after attaining, to retain in his/her ownership an amount of the company's shares that is double the value of the gross value of the earnings opportunity allocated to him/her in the most recent ongoing plan. Each participant in the plan is expected to use 50 per cent of the net bonus he/she receives from the plan to accrue his/her share ownership until such ownership meets the level recommended above. Share ownership accrues either by retaining ownership of bonuses received as shares or by acquiring shares through cash bonuses received under the plan.